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Cyprus Tourism Slump Seen Narrowing As Year-End Forecast Improves

Cyprus’ tourism downturn is expected to ease further before the end of the year, with arrivals now forecast to finish around 5 per cent below 2025 levels, according to Tourism Deputy Minister Kostas Koumis.

The latest data from the statistical service, Cystat, show that tourist arrivals reached 2,820,649 between January and August, a 7 per cent decline compared with the same period last year. That marks an improvement from the 8 per cent drop recorded through the first seven months.

Strong Start, Sudden Disruption

Speaking at the inauguration of new cycling routes in Troulloi, Aradippou, Koumis said the year began on a notably strong note, with January and February each posting record results for their respective months.

“We had the best January and the best February we have ever had,” he said, before pointing to the sharp reversal in March, when instability in the Middle East disrupted air travel to and from Cyprus.

According to Koumis, about 70 per cent of flight programmes serving Cyprus were cancelled indefinitely overnight, forcing the government and the Tourism Deputy Ministry to respond to what he described as one of the most serious crises the sector has faced in decades.

Protecting Air Connectivity

March and April were particularly difficult, he said, as uncertainty over flight availability weighed heavily on visitor numbers and left the sector facing a far weaker spring than expected.

In response, much of the government’s effort shifted toward preserving air connectivity. Authorities worked to persuade airlines to maintain their Cyprus schedules while also engaging tour operators and organisers focused on niche tourism to keep the island in their programmes.

Several months later, Koumis said that strategy had delivered results. “Looking back, we can say that we succeeded,” he said.

The Numbers Show A Gradual Recovery

The improvement is visible in the data. During the first four months of the year, the industry was tracking a decline of around 18 per cent. By the end of July, that gap had narrowed to 8 per cent, and the latest August figures reduced the eight-month drop further to 7 per cent.

August alone recorded 581,880 tourist arrivals, down 3.3 per cent from 602,026 a year earlier, though still 4.9 per cent higher than August 2024.

Koumis said he expects the shortfall to narrow again over the remaining months of the year, adding that “by the end of the year we will be talking about a decline of around 5 per cent”.

He noted that a contraction of that scale can occur in any sector without necessarily signalling a deeper structural issue.

Industry Support Remains Central

Koumis also thanked tourism bodies for their support during the disruption, saying the government and the private sector would continue working together to improve the year-end outcome.

LVMH Revenue Rises, But China Weakness Continues To Weigh On Luxury Giant

A Softer Quarter Exposes The Limits Of Luxury’s Recovery

LVMH, the world’s largest luxury group and parent of Louis Vuitton, Dior, Celine and Hennessy, reported revenue of €18.5 billion in the three months to the end of September, underscoring both the scale of its business and the pressure building across parts of the luxury market.

The company’s revenue rose 1.2% year on year in the third quarter, following a 0.1% increase in the second quarter and a 5.9% decline in the first. The trajectory points to stabilization, but not yet to a convincing rebound.

Organic Growth Misses Expectations

Organic sales growth, which strips out currency effects and portfolio changes, slowed to 1% in the third quarter from 3% in the previous quarter. That result fell short of market expectations and reinforced concerns that the luxury cycle remains uneven.

For the first nine months of the year, LVMH generated sales of €57.1 billion, with organic growth of 2%.

In its statement, the company highlighted the breadth of its portfolio, saying that diversification continues to provide resilience in an uncertain geopolitical and economic environment. That remains one of LVMH’s defining strengths: when one category weakens, another can help offset the downturn.

China Remains The Key Pressure Point

LVMH said sales performed well in the United States, Europe and Japan, but conditions in China remained less favorable. That matters because the country has long been one of the most important growth engines for global luxury brands.

The fashion and leather goods division, LVMH’s most closely watched unit, saw organic sales fall 5% as weaker demand in China weighed on performance. Deutsche Bank said the decline was steeper than the roughly 2% drop expected by analysts.

The segment had delivered its first organic sales gain in two years in the previous quarter, making the latest retreat a notable setback.

Brand Equity Faces A Test In China

The quarter also highlighted the reputational risks facing global brands in China. Louis Vuitton drew criticism after suing local tea company Molly Tea over logo copying. Although the company won the case, the dispute sparked social media backlash and boycott calls, adding another layer of pressure to an already fragile environment.

For a company built on scarcity, aspiration and brand discipline, perception is an asset as valuable as inventory. In a market as digitally connected as China, that asset can shift quickly.

Mixed Performance Across The Portfolio

Not every division weakened. LVMH’s selective retailing business, which includes Sephora, posted an 8% organic sales increase. Watches and jewellery, along with wines and spirits, both recorded 6% organic gains.

That broad mix is precisely what has historically given LVMH an advantage over rivals: it can absorb softness in one category without relying on a single growth driver.

Analysts See A Longer Recovery Ahead

Deutsche Bank analysts said the results could lead to further cuts in earnings forecasts for the second half of 2026 and 2027. They added that it is difficult to see what could improve investor sentiment in the near term.

Still, the bank framed the weakness as cyclical rather than structural. In its view, recovery is taking longer because Chinese demand remains subdued, but the problem does not appear to reflect a permanent deterioration in the brand franchise. Analysts said ongoing brand initiatives are beginning to show results, though improvements are likely to remain gradual.

Investor Pressure Continues To Mount

LVMH’s share price has fallen nearly 40% since the start of the year. In September, L’Oréal overtook the group as France’s most valuable listed company, a symbolic shift that captures how sharply sentiment has changed.

Shares in LVMH were down more than 1.6% in Paris around 10 a.m. CEST following the release.

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